The Company measures the interest rate swaps at fair value on a recurring basis. The fair value measurements are categorized within Level 2 of the fair value hierarchy. The Company estimates the fair value of the interest rate swaps using a discounted cash flow model and significant inputs including observable Secured Overnight Financing Rate (“SOFR”) forward curve, discount rates, credit valuation adjustments, counterparty credit risk, and non-performance risk. There were no transfers between fair value hierarchy levels during the six months ended June 30, 2026.

On March 27, 2025, the Company entered and closed a $7,000,000 credit facility with Bridge Bank, a division of Western Alliance Bank (“WAB”), which is a national, FDIC-insured commercial bank. The Company incurred financing costs of $263,374 in connection with closing the loan. The Company intends to use the loan proceeds to support existing growth initiatives, provide additional working capital, and refinancing a small amount of existing debt. The credit facility has a term of four years and bears interest at a rate equal to the greater of a) the SOFR plus 4.9% and b) 9.0% per annum. Based on the current SOFR rate of 4.3%, this implies a current interest rate of 9.2% per annum. The facility amortizes over a six-year period and there are no prepayment penalties. Interest will be paid on a monthly basis. On September 9, 2025, the Company amended the credit facility limit to a maximum of $12,000,000 and a further $5,000,000 was drawn.

On May 14, 2025, the Company executed an interest rate swap transaction with WAB for Tranche 1. The Company will bear interest of 8.07% per annum whereas WAB bears 4.32520% plus 400 bps interest per annum. The interest rate swap gives rise to a derivative liability, which was initially recorded at $92,124.

On September 15, 2025, the Company executed an interest rate swap transaction with WAB for Tranche 2. The Company will bear interest of 7.53% per annum whereas WAB bears 4.1739% plus 400 bps interest per annum. The interest rate swap gives rise to a derivative liability, which was initially recorded at $24,644.

The interest rate swaps were remeasured at June 30, 2026 and were estimated to be a net derivative asset of $11,342 for both tranches (December 31, 2025 – net derivative liability of $137,041).

The following is a summary of movements in the interest rate swap during the six months ended June 30, 2026 and year ended December 31, 2025:

On January 1, 2026, as a result of the change in functional currency from CAD to USD (Note 2.1), certain warrants previously classified in equity no longer met the criteria for equity classification as the warrants possess exercise prices in CAD and no longer represent an instrument for providing the Company with fixed proceeds in exchange for a fixed number of its shares due to foreign exchange. As such, the warrants are accounted for as derivative liabilities measured at fair value. The previously recorded equity balances associated with these warrants were derecognized at their fair value measured on January 1, 2026 with the resulting difference recorded within paid in capital. No gain or loss was recognized in earnings upon reclassification.

The warrant liabilities are subsequently measured at fair value at each reporting date, with changes in fair value recognized through profit or loss. The fair value of the warrant liabilities was determined using a Black-Scholes option pricing model, which incorporates significant unobservable inputs (expected stock price volatility and estimated term) and is classified within Level 3 of the fair value hierarchy.

During the three and six months ended June 30, 2026, the Company recorded an unrealized loss of $337,167 and an unrealized gain of $433,547, respectively, on changes in fair value of warrant liabilities (2025 – $nil 0 and $nil 0, respectively).

The warrant liabilities were measured using the following inputs in the Black-Scholes option pricing model:

As at June 30, 2026 and December 31, 2025, the following warrants were issued and outstanding: